Medicare Part B is not mandatory, but skipping it usually costs you more later

You do not have to take Medicare Part B when you turn 65, but most people end up paying a penalty if they wait. Part B covers doctor visits, outpatient care, and medical equipment — things Original Medicare Part A (hospital insurance) does not pay for. If you delay Part B without a valid reason, Medicare adds a permanent 10 percent surcharge to your monthly premium for each year you were may be able to access but did not sign up. That penalty stays with you for life.

The main exception is if you are still working and covered by your employer's health plan. In that case, you can delay Part B without penalty as long as your employer has 20 or more employees. Once you leave that job or lose the coverage, you have a window to sign up without the penalty — usually eight months after your employment ends or your coverage stops.

Key Takeaways

  • You can decline Medicare Part B at 65, but Medicare charges a 10 percent penalty on your premium for each year you delay, and that penalty is permanent.
  • If you have health insurance through a current employer with 20 or more workers, you can delay Part B without penalty.
  • Once you leave that job or lose employer coverage, you have eight months to sign up for Part B penalty-free.
  • If you miss the important date and do not have a may have access to reason, you can only sign up during the general enrollment period (January 1 to March 31 each year), and the penalty applies.

When you can legally skip Part B without a penalty

The only situation where Medicare does not penalize you for declining Part B is if you have group health insurance through your current job. Your employer must have at least 20 employees on the payroll. This is called having "creditable coverage," and it means your employer plan is considered as good as or better than Medicare Part B.

If you are in this situation, you can turn down Part B at 65 and stay on your employer plan instead. You do not need to do anything special — just do not sign up for Part B. When you eventually retire or lose that coverage, Medicare gives you a Special Enrollment Period. You have eight months from the date your employment ends or your coverage stops to sign up for Part B without any penalty.

Self-employed people and those with coverage through a spouse's employer should check with their plan administrator or call Medicare at 1-800-MEDICARE to confirm whether their coverage counts as creditable. The rules are strict, and miscounting can be expensive.

What happens if you miss the important date

If you do not sign up for Part B when you are first may be able to access and you do not have a may have access to reason (like active employer coverage), you enter what Medicare calls a "late enrollment penalty." The penalty is 10 percent of the Part B premium for each full 12 months you were may be able to access but did not enroll.

Here is how it works in practice: if the standard Part B premium is $164.90 per month in 2024 and you delay for three years, your penalty would be 30 percent of that premium — roughly $49.47 per month added to your bill. That extra amount stays on your bill for as long as you have Part B, even if you move to a different plan later.

The only way to remove the penalty is to have a valid reason Medicare accepts. Those reasons are narrow: you had creditable coverage through an employer, you were a U.S. citizen living abroad, or you received incorrect information from a Social Security or Medicare office. Most people who straightforward delayed because they thought they did not need it do not may have access to for penalty removal.

How to sign up for Part B if you missed your important date

If you did not sign up during your Initial Enrollment Period (the seven-month window centered on your 65th birthday), you can still sign up, but only during the General Enrollment Period. This runs from January 1 to March 31 each year, and coverage begins July 1 of that year. That means if you miss your important date and sign up in February, you will not have Part B coverage until July.

To sign up outside your Initial Enrollment Period, you can visit Medicare.gov, call 1-800-MEDICARE, or visit your local Social Security office in person. You will need your Social Security number and information about any current health coverage you have. If you have a late enrollment penalty, Medicare will tell you the amount when you sign up.

Part B costs and what it covers

Part B has a monthly premium, an annual deductible, and coinsurance costs. The premium changes each year — it was $164.90 per month in 2024, but varies based on your income. The annual deductible is $240 in 2024. After you meet the deductible, you typically pay 20 percent of the cost for doctor visits, outpatient surgery, diagnostic tests, and medical equipment like wheelchairs or oxygen.

Part B does not cover everything. It does not pay for routine dental, vision, or hearing care. It does not cover long-term care or custodial care in a nursing home. Many people buy a Medigap (supplemental insurance) policy or choose Medicare Advantage to cover the gaps Part B leaves.

If you are on a tight budget, you may may have access to for the Medicare Savings Program, which helps pay your Part B premium and other out-of-pocket costs. Each state runs its own program, and income limits vary. You can find your state program through Medicare.gov or by calling 1-800-MEDICARE.

Part B versus Medicare Advantage: which path avoids the penalty

Some people think they can avoid Part B by choosing Medicare Advantage instead. That is not how it works. Medicare Advantage is a private insurance plan that replaces Part A and Part B — you must be enrolled in Part B to join a Medicare Advantage plan. You cannot skip Part B and go straight to Advantage.

However, if you enroll in Medicare Advantage during your Initial Enrollment Period, you will not face a Part B penalty later if you switch back to Original Medicare. The key is signing up for something during that seven-month window. If you do nothing at all during that window, the penalty clock starts ticking.

What to do right now if you are turning 65 soon

If you are within three months of your 65th birthday, you should decide whether to take Part B or decline it based on your current coverage. If you have employer health insurance with 20 or more employees, you can safely decline. If you do not have that coverage, sign up for Part B during your Initial Enrollment Period — the seven months that start three months before the month you turn 65 and end three months after.

You can sign up online at Medicare.gov, by phone at 1-800-MEDICARE, or in person at your local Social Security office. Have your Social Security number ready. If you are unsure whether your employer coverage counts as creditable, call your benefits administrator or Medicare before you decide.

If you are already past 65 and did not sign up, do not wait. The sooner you enroll, the sooner your coverage begins and the sooner you can stop worrying about the penalty growing larger.

Frequently Asked Questions

Can I drop Part B after I sign up for it?

Yes, but you can only drop it during the General Enrollment Period (January 1 to March 31). If you drop Part B, you cannot sign back up until the next General Enrollment Period, and you may face a late enrollment penalty when you do. Only drop Part B if you are certain you have other coverage that will pay for doctor visits and outpatient care.

Does the Part B penalty ever go away?

No. Once Medicare adds the penalty to your premium, it stays there for the rest of your life, even if you switch plans or move to a different state. The only way to avoid it is to have a valid reason Medicare accepts, and those reasons are very narrow. Most people cannot remove a penalty once it is applied.

What if I was working past 65 and did not know I had to sign up for Part B?

If you had creditable coverage through your employer, you did not have to sign up. But if your employer had fewer than 20 employees, you should have signed up when you turned 65, even though you were still working. Contact Medicare to explain your situation — they may waive the penalty if you can show you received incorrect information from a government office.

Do I need Part B if I have a Medigap policy?

Yes. Medigap is supplemental insurance that works alongside Original Medicare Part B. You cannot have Medigap without Part B. If you want supplemental coverage, you must enroll in Part B first.

What if I cannot afford the Part B premium?

You may be able to get help through your state's Medicare Savings Program, which pays some or all of your Part B premium if your income is low enough. Contact your state Medicaid office or call 1-800-MEDICARE to find out whether you may have access to and how the process works.